Analysis: Graduate recruitment – Has the City lost its charm?

Gwen Jing - Deputy News Editor 19 November 2012

Against a backdrop of lower bonuses, higher job insecurity and intensifying regulatory crackdowns, the number of Cambridge students expressing interest in banking and finance careers has seen a decline this year, according to the Cambridge University Careers Service.

Two hundred fewer students turned up to banking career events at the Careers Service earlier this term, an 18% decline relative to last year.

Gordon Chesterman, Director of the Cambridge University Careers Service, believes this is due to a “change in preferences” from Cambridge students. “They are looking at the credibility and reputation of careers in the City, and some people are calling it into question”, he said in an interview with The Cambridge Student.

The fall in interest in the banking profession has been met by a corresponding increase in interest from students in management consulting. “I have a suspicion that those who are shying away from banking careers are moving towards the management consulting option,” said Mr Chesterman.

One third year student at Cambridge, who is choosing a career in management consulting over banking after graduation, cited “long working hours” and “poor job security” as key deterrents for working in the City. “I just think I wouldn’t survive the hours. I would like more industry exposure and think consulting provides that,” she told TCS.

Despite the fall in interest this year, the number of Cambridge students entering the financial services profession has shown an increase over the last three years: the number of first degree graduates from Cambridge going into banking last June rose by 35%, with 138 taking a job in the City compared to 102 in 2009.

“It’s always tough out there getting a job in banking, but our students do succeed. The evidence is that we have a large proportion getting into that sector. But equally, five times more people do not go into that sector”, Mr Chesterman said.

Arjun Bali, a second year Economics student, is headed down the City route with an internship secured for the summer, and explains that despite the current conditions, he is drawn to the City for the thrill. “Working in the City is exciting because you are in the heart of the world’s financial centre,” he said. “It is challenging and extremely fulfilling”.

Another recent trend is that more graduates are taking jobs overseas. Data for 2011 by HESA shows a 27% increase in the number of British graduates taking overseas jobs since the onset of the financial crisis in 2008; this trend is especially marked for Oxbridge graduates, with a 43% rise in graduates from Oxbridge leaving the UK in the past four years.

Indeed the Careers Service has noticed a growth in small foreign hedge funds and venture capital firms who are “targeting” Cambridge students. Mr Chesterman claims that, added together, these foreign firms account for “quite a sizeable number” of employment for Cambridge students and “provide a very useful plan B or plan C” forĀ  them.

Job vacancies in the UK’s financial sector dropped by nearly 25% in the third quarter of 2012, compared to the same period last year. Continental Europe has similarly seen a 28% drop in jobs in finance, and the US’s Wharton Business School sent only 16.6% of their graduates to Wall Street in 2011, down from 25% in 2008.

Forecasts for the financial services job market continue to paint a gloomy picture, with the Centre for Economics and Business Research projecting a cut of over 30,000 jobs in the City for this year.

Gwen Jing – Deputy News Editor